Bosnia and Herzegovina suffered greatly during an intense war that resulted in human catastrophe, economic collapse, and the destruction of the electricity sector. The Dayton Agreement that brought a close to fighting helped to win peace, but it created a government system that is inefficient, is largely duplicated along ethnic lines and has a largely ineffective central state. This pattern of duplication carries over to the electricity sector and creates incentives that hinder its development. In this context, sectoral reform has proved difficult, with almost all effort devoted to the sector since 1996 channeled towards restoration to pre-war operational conditions and overcoming opposition to reform. Nevertheless, Bosnia and Herzegovina’s efforts at reforming the electricity sector are underway and substantial progress has been made. Lingering questions about the success of reforms essentially reduce to questions about the future of Bosnia and Herzegovina itself and the ability of the central state to consolidate power while preserving the rights and interests of all ethnic groups.